20180814-广发证券_香港_-A-Share_Investment_Strategy__Positive_on_the_property_sector_2页_362kb

A-Share Investment Strategy Summary

Core Content

This document outlines the investment strategy for A-shares, with a particular focus on the property sector and infrastructure industry chain. The analysis is conducted by the GF Securities (Hong Kong) research team, led by Ou Yafei, and includes insights from Dai Kang, though he is not a registered licensee with the Securities and Futures Commission.

Main Views and Key Information

1. Property Sector Outlook

• The property sector is viewed positively, despite no immediate need for policy easing.
• Credit easing may indirectly benefit the sector through reduced financing costs for developers and increased mortgage preference by banks.
• Property stocks are considered cheap, with valuations close to historical lows.
• Sub-sectors such as upstream building materials and midstream landscaping are particularly attractive.
• Earnings performance across the property industry chain has been robust, with growth in the steel and decoration sectors exceeding that of 1Q18.
• Equity funds have low positions in upstream and midstream property stocks, indicating potential undervaluation.

2. Infrastructure Sector Correlation

• Historically, infrastructure and property sectors have shown strong correlation during "growth stabilization" cycles (2008, 2012, 2014).
• However, recent trends show divergence, with infrastructure stocks outperforming and property stocks lagging.
• The strategy recommends maintaining a positive stance on cyclical stocks within both the infrastructure and property industry chains.

3. Mortgage Policy and Risk Appetite

• Mortgage policy is expected to undergo mild easing, supported by high-frequency data showing a significant decline in mortgage loan growth across 35 cities.
• This easing could boost risk appetite in the property industry chain.
• External risks, such as concerns about the Chinese economy and China-US trade tensions, may also increase expectations for policy easing, further supporting the property sector.

4. Recommended Investment Themes

• 5G networks
• SOE (State-Owned Enterprises) reform

5. Consumer and Growth Stocks

• Consumer stocks with reasonable or low valuations compared to overseas peers, such as retail and food processing, are worth watching.
• Growth stocks in sectors like computers and aerospace offer potential for alpha generation.

6. Risks to Consider

• China-US trade frictions continue to escalate.
• Interim company reports may come in below expectations.
• Sharp depreciation in the RMB exchange rate.

Sector and Company Ratings

Sector Ratings

Company Ratings

Disclaimer and Legal Information

• This report is for informational purposes only and does not constitute an offer to buy or sell securities.
• It is intended for GF Securities (Hong Kong) clients only.
• The report does not take into account the specific investment objectives or financial situations of individuals.
• No liability is accepted for any loss arising from the use of the report.
• The views and opinions expressed are those of the analysts and may change without notice.
• GF Securities (Hong Kong) may issue contrary communications or have different investment decisions from the report.

Contact Information

• Ou Yafei: SFC CE No. BFN410, oyf@gf.com.cn, +86 20 8757 3009
• GF Securities (Hong Kong) Brokerage Limited: 29-30/F, Li Po Chun Chambers, 189 Des Voeux Road Central, Hong Kong
• Tel: +852 3719 1111, Fax: +852 2907 6176, Website: http://www.gfgroup.com.hk